Fintech unicorn Funding Circle is getting an extra £40 million of UK government money to lend to businesses

LONDON — The UK government has given peer-to-peer lending
platform Funding Circle an extra £40 million to lend to small
businesses.

The funding comes from the state-owned British Business Bank and
means the total cash invested on Funding Circle's platform is now
£100 million. The British Business Bank committed £60 million to
the platform in 2013.

Catherine Lewis La Torre, CEO of British Business Bank
Investments, says in an emailed statement: "Peer-to-peer lending
is becoming an increasingly important source of finance for
smaller businesses, with AltFi data showing an 85% increase in
lending via the sector from 2014 to 2015.

"A key part of our remit is to support the development and growth
of such finance markets, while earning an attractive, commercial
return for the taxpayer. We look forward to seeing our latest
commitment to Funding Circle enabling the growth and success of
many more businesses across the UK."

The British Business Bank was set up by the government in 2012
with £1 billion of funding to increase funding to small and
medium enterprises (SMEs). It does not finance SMEs directly but
works through partners and intermediaries to extend funding.

Funding Circle will loan the money it has secured to small
British businesses. The money will not be invested in Funding
Circle itself but on its platform, which matches investors with
businesses looking to borrow.

James Meekings, cofounder and UK managing director of Funding
Circle, says in a statement: "Over the last six years, Funding
Circle has proved to be a more efficient way for small businesses
to access the finance they need to grow and expand, whilst
providing investors with attractive, stable returns. This further
lending commitment is recognition of the success of the
partnership to date and we look forward to working with the
British Business Bank to help thousands more small businesses.

"This further lending commitment is recognition of the success of
the partnership to date and we look forward to working with the
British Business Bank to help thousands more small businesses."

Funding Circle has over 55,000 investors on its platform,
including individuals, local authorities, and financial
institutions. It has lent over £1.7 billion since 2010.